China blocks New York Times over Wen Jiabao wealth claims

Chinese leader is thought to disapprove of his family's business dealings – but revelations could still damage him

CHINA has blocked the New York Times website and censored social media after the paper published an article saying Premier Wen Jiabao's family members and relatives control assets worth at least $2.7bn.

"Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership," the newspaper wrote.

"In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners."

Chinese foreign ministry spokesman Hong Lei said of the New York Times investigation: "Some reports smear China and have ulterior motives." On the blocking of the paper's website, he said only that "China manages the internet in accordance with laws and rules".

The state has blocked the report despite that fact that the Times makes it clear that no holdings have been found in Wen's name and says it is uncertain how much the 70-year-old knows about his family's wealth. "State Department documents released by WikiLeaks in 2010 included a cable that suggested Mr. Wen was aware of his relatives' business dealings and unhappy about them," the paper says.

The cable in question dates from 2007 and quotes a Chinese-born executive working at a US company in Shanghai, who told American diplomats: "Wen is disgusted with his family's activities, but is either unable or unwilling to curtail them."

It is thought that Wen, who enjoys a reputation in China as a populist and a reformer, and it often referred to in the state-run media as "the People's Premier" and "Grandpa Wen", even considered divorcing his wife, who became known as the ‘diamond queen' because of her lucrative interests in the gemstone trade.

The Times report comes at a sensitive time in China, where the divide between rich and poor is growing. Claims that the Communist Party elite have abused their influence to make money have exploded into the open thanks to the Bo Xilai scandal.

The BBC's John Sudworth says that whether or not Wen disapproves of his family's business dealings, the Times's allegations will be "highly sensitive and potentially damaging", especially as "the investigation shows that much of the wealth has been accumulated in areas of the economy over which he has direct authority".

The Financial Times agrees that the report could damage Wen's standing in the Communist party. "Although he is set to retire after next month's congress, he has been one of the most important proponents of political reform in the party and is likely to seek to retain influence in driving that agenda after he steps down, as have many other Chinese politicians," the paper says.